TOKYO (Nov 12): Benchmark Tokyo rubber futures rose to three-month highs on Wednesday as the yen slipped to a seven-year low and Japanese shares hit a fresh seven-year peak on growing expectations that Prime Minister Shinzo Abe will postpone a sales tax hike.

The Tokyo Commodity Exchange rubber contract for April delivery climbed 4.5 yen, or 2.2 percent, to finish at 204.8 yen ($1.775) per kg. It earlier rose to 205.8 yen, the highest since Aug. 11.

"Rubber prices were driven by the yen's weakness and gains in stock market," said Toshitaka Tazawa, an analyst at Fujitomi Co.

The yen had been flirting with a seven-year low against the dollar amid expectations of tax hike delay, although the yen pulled back in late trade after comments from a Japanese government official cooled speculation that PM Abe will call a December election.

Japanese stocks scaled seven-year highs on Wednesday, as investors gave the thumbs-up to a media report that PM Abe will delay a second sales tax hike to avoid damaging a fragile economic recovery.

"Behind the TOCOM gains was also hope that rubber producing countries may come up with measures to shore up prices, such as restricting export, when they meet later this month in Kuala Lumpur," Tazawa said.

The most-active rubber contract on the Shanghai futures exchange for January delivery rose 380 yuan to settle at 13,015 yuan ($2,124) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for December delivery last traded at 155.10 U.S. cents per kg, up 1.2 cent. ($1 = 6.1257 Chinese yuan) ($1 = 115.3800 Japanese yen)